Economy Still Not Generating Enough Jobs

by James Parks, Jul 7, 2006

Despite Bush administration claims that the economy is strong, job growth fell far behind the rate expected for the third month in a row, according to the Labor Department’s monthly jobs report. The nation’s job machine, which never really revved up after the recession, is slowing down—and that could mean even fewer jobs in the future, according to a report by the Economic Policy Institute.

The economy generated only 121,000 new jobs in June, for a quarterly average of 108,000 per month, far below the previous quarter’s average rate of 176,000, making this the slowest quarter for job growth since the third quarter of 2003, says EPI senior economist Jared Bernstein.

The increase in jobs is not even enough to keep up with the increase in the nation’s population, according to the U.S. Census Bureau.

The U.S. Bureau of Labor Statistics reported today the private sector added only 90,000 jobs last month—86,000 per month over the quarter—a clear sign that the economy is generating fewer jobs, Bernstein says.

At the same time, workers’ wages are creeping along. Over the past year, weekly wages increased about 4.5 percent, barely keeping up with inflation.

In his recent book, All Together Now: Common Sense for a Fair Economy, Bernstein says slow job growth is a natural result of government policies that favor the rich:

Massive tax cuts for rich people, privatization, deregulation are unequivocally not associated with better macroeconomic outcomes. They demonstrably have not led to faster growth, in terms of GDP(gross domestic product), employment or productivity. What they have done…is led to huge redistributions of wealth.

And wealth isn’t the only thing redistributed…. Economic risk also has shifted squarely onto the shoulders of the less advantaged.

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